ABSTRACT
Derivative analysis is a disciplined approach to facilitate discussion and debate among executives and managers during strategic planning sessions. Its techniques enable participants to derive and structure the resources necessary to execute a chosen strategy by calling to action the sage advice from the thought leaders discussed in Section I. ese include the lessons from the following:
• Porter, on how best to structure activities to form a competitive value chain
• Treacy and Wiersema, on how best to structure an operating model to support a chosen strategic discipline
• Kaplan and Norton, on how best to structure performance measures and reveal cause-and-eªect relationships between various assets using a balanced scorecard and a strategy map
• Haeckel, on how best to adapt to change and opportunity using sense-and-respond techniques, the adaptive loop behavior model, a modular organization, and the commitment management protocol
Derivative analysis uses the relevant best practices of all thought leaders discussed throughout this book, building upon each to create a more comprehensive framework within which to formulate strategy, align resources for execution, and prepare the organization to respond properly to change as it occurs. Moreover, it guides discussion and decision to derive speci—c and discrete details for resource alignment without which strategy and execution can become unraveled. Here, derivative analysis helps conclude how:
• Workforce behavior must be guided to overcome anticipated and unanticipated anomalies in execution
• Business processes must be designed and augmented with control processes to maintain performance consistently within predetermined thresholds
• In-place information technology must be adapted or augmented to support dynamic process-centric capabilities. Process-centric systems monitor business activity in real-time, assisting the workforce with process execution and using exception and resolution management controls to keep performance from varying outside acceptable thresholds and prevent, or minimize, adverse consequences to key performance indicators
It is necessary for executives and managers charged with strategy and execution to understand resource alignment to this level of granularity. Without such understanding, critical details necessary to manage performance may be le¢ unaddressed or relegated downstream in the organization where they may be overlooked. As noted earlier by Bossidy and Charan (2002, p. 22), “Execution is a systematic process of rigorously discussing ‘hows’ and ‘whats’, questioning, tenaciously following through, and ensuring accountability.” If you don’t know the critical “hows” and “whats,” and don’t ask the right questions with su«cient detail, resources fail to align, hobbling a strategy from its beginning.
